California · Financial Code

FIN §5400: (a) No funds from proposed stockholders, members, or organizers of any proposed association may be collected until a verified application for an organizing permit has been filed and a permit has been

What this law says, in plain English

Organizations cannot collect funds from prospective stockholders, members, or organizers until filing a verified application for an organizing permit and receiving approval.

Read the full statutory text

(a) No funds from proposed stockholders, members, or organizers of any proposed association may be collected until a verified application for an organizing permit has been filed and a permit has been issued by the commissioner authorizing collection of funds, and then only in accordance with the terms of the permit. (b) As used in this chapter, the term “organizer” means a person who agrees to contribute funds to a proposed association to be used for its organization expenses.

Verify at the official source: California legislative text

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